Sustainable growth among the biggest, most persistent challenges for businesses
Is your business sustainable? We’re not talking about your company’s eco awareness and its impact on the environment. As important as that may be to you or your audience, I’m instead concerned about your sustainable revenue growth.
Sure, studies have shown there’s a potential revenue benefit to going green.
Yet, if your company doesn’t have a business model and strategic plan that is revenue growth sustainable, then turning off the lights when you leave the bathroom won’t help much.
Sustainable growth is among the biggest challenges businesses face and it isn’t a new problem. Statistics vary, however there’s one persistent reality -- if you haven’t created a scalable and repeatable business model, you’ll struggle to grow.
It’s the difference between taking two steps forward and then three steps back versus having steady and predicable growth. Signing up a few customers a month only to lose 15 to 25 percent of the customer base every year isn’t exactly ideal.
But, successful buyer retention is only a small part of what business sustainability is.
Tesla doesn’t seem to have any trouble attracting new customers, yet since the year of its IPO in 2010, the company raised $19 billion in capital and produced negative cash flow of $9 billion. That’s what happens when you combine a massive cash burn with gigantic capital investments to fund upcoming projects.
Whoa, that’s nowhere close to a sustainable business model!
Unless you have Tesla’s ability to persuade investors to dump billions into the company, you’ll need a more solid game plan.
A framework for generating revenue. Every company from startups to billion-dollar enterprises needs a clear-eyed business strategy with a heavy emphasis on its revenue model. The starting point is to identify which revenue sources to pursue -- the narrower the better, otherwise you’ll get out-of-focus quickly. Then include the value you offer to specific target segments, along with how to price and sell your product or service to fit the value. Finally, create an actionable roadmap for the future that is specific, measurable, and attainable. This is your “success beacon” from which all decisions are made. Once you have a well-defined revenue model, it’s much easier to fund operations, establish marketing plans, and generate steady growth and profitable revenue.
Operations need to match the business strategy. Companies tend to fall into two broad operational models; slash and burn the expenses or as in Tesla’s case, spend like crazy. Attaining current and future goals requires balance and a strong dose of reality. Your business strategy and revenue model are the guiding principles. Develop an operating model that you can manage and make decisions based on that -- all centered on your framework for generating revenue. As an example, Costco’s strategy is to attack the market as a no frills, stack ‘em high retailer with low margins and very high volumes. So, it makes sense for them to operate out of huge basic warehouses with pallets stacked high, keeping expense in check. But, they’re not cheap and spend within the scope of their revenue model to promote their brand and provide first-rate customer service.
Have a repeatable sales model. Let’s agree that revenue generation built on converting random cold calls into prospects and then customers may be repeatable, but it’s not a workable long-term solution. To create a sustainable business, develop and implement sales practices and processes that are successfully deployed again and again at greater scale. Do this by understanding how your target customers buy and the journey they take to get there. Now mirror the buying journey as a series of selling actions, then serve up the call-to-action and marketing tools that match. Now it’s much simpler to add new hires that are easily plugged into your system and tweak the process as needed without disruption. The result is that you can increase the sources of your customer leads on a consistent basis and improve the conversion rate. The bonus is that revenue that can be consistently forecast.
A business that grows too slowly will stagnate and eventually cease to exist. It’s just not sustainable.
Steadily growing a business for profit requires the right mix of an overall strategy with a scalable operating model and a repeatable selling model.
What's your strategy for generating sustainable revenue?
Ron Stein is founder of More Customers Academy, helping business leaders build strategic messaging and positioning that cuts through the competitive noise to grow revenue. Ron has developed his own highly successful 5-step Stand Out & Sell More approach to winning new customers as a result of his twenty-five years of business development, marketing, and selling experiences. He works with a range of businesses, from startups to large corporations across industries including technology and healthcare, manufacturing, and financial services and banking. Ron conducts workshops, leads company meetings, offers keynote talks, and consults. He can be reached at 727-398-1855 or by email.